Financial Planning

You really like to have an eye on your waistline but why don’t you watch your waistline too? You should eat better foods and eat less and this can go hand in hand with spending less getting all your finances organized and in order. In fact you should do both and not any one of them. You should try to be more frugal in both the cases and should aim to improve in both the choices.

In the eating arena you should eat well, the healthier foods in smaller portions as in more of fruits and vegetables. On the other hand in the money arena you should make a strict budget and make sure you stick on that budget. You should buy only things you actually need it and use cash wherever possible. Less splurges at the grocery shop will help you with the food bill which in turn will help in improving your finances as soon as possible.

So what is the idea of this debt diet?

It is nothing but some simple steps by which people can increase their incomes and decrease their debt figures. This debt diet has helped several families in solving their financial dilemmas.

First, it is important for you to find out how much debt you exactly have and what is it costing you? Note down all the information of your existing debt and keep a track on your credit score as well as report. You can check your credit reports for free at AnnualCreditReport.com

Also you should prioritize your bill payments. Pay on your necessities, followed by paying your taxes and any other government specific obligations.

Secondly, keep a track on your spending limit. Find out some extra money to pay down the debt. This is also called the Latte Factor i.e. how much are you spending on your latte that is on any goods that you regularly buy every year.

Thirdly, Know how to use credit cards wisely. Pay more than the minimum. Try to negotiate with your credit card issuer on the terms of interest rate. If you are a good customer then some kind of leverage should be provided to you. Determine the right type of credit card for you. For debt reduction it is always advisable for you to use balance transfer cards or 0% interest cards. It is important for you to understand how the credit cards work.

Fourthly, please stop spending. I don’t think you still require any explanation on this.

Fifthly, Have a monthly budget and spending plan. This is best way in planning your income and expenses as well as your unexpected expenses.

Sixthly, figure out some ways of expanding your income. Make sure you set a target for yourself and try to achieve it. Do a part time job or even freelancing.

Seventhly, give a priority to your debt amount and improve your credit score. Improve your credit ratings and negotiate on the interest rate amount.

Lastly, understand yourself and your spending attitude. Try to figure out reasons of excessive spending. Learn how to invest money for future purposes.

Always remember that in both spending & eating – less is more.